Decision may lead to higher costs and greater liabilities for employers

California employers who engage independent contractors are now subject to a stringent new test that may ultimately force employers to reclassify many of these workers as employees, according to a ruling by the California Supreme Court on April 30, 2018.

As we begin 2018, there are three areas to keep an eye on due to the uptick of claims and changing landscape: property, cyber and data security, and employment practices liability.

Property

In 2017, the US experienced many natural disasters. Damages from Hurricanes Harvey, Irma, and Maria and California fires are expected to result in record property losses. We can anticipate an increase in premium for all property, including vehicles. Auto premiums are already through the roof because of an increase in claims and expenses due to distracted driving and expensive technology. With almost 1 million cars lost during the hurricanes, the rates are bound to increase further.

Takeaway: 2017 losses were at a record high, but there is ample surplus in the insurance marketplace to absorb these claims. This year, we expect insurance companies to increase rates. If you have a favorable claims history, work with your broker to maintain your current pricing.

Researchers in the social sciences are seeking to understand the components that create the elusive condition we call happiness. The happiness factor is coming into play in the work arena as well with studies showing the importance of job satisfaction in retention of top talent. As discussed in How to Keep Your Employees Happy—Part 1: Quality Benefits, studies suggest that employee benefits play an important role in the overall satisfaction employees experience in their jobs.

Many employers recognize the importance of job satisfaction when it comes to finding and retaining talented workers. In simple terms, they want their employees to be happy. Competitive salaries, compelling work, and a positive environment are big drivers of the happiness factor but more and more, particularly in industries that are arm wrestling for the best talent, a strong employee benefit package is a game changer. Offering strong health benefits as well as retirement and voluntary benefits can be the difference between recruiting a key staffer and losing them to your competition.

According to studies by MetLife and Unum, quality benefits and coinciding benefit education make a measurable difference in employee recruitment, retention, and reported job satisfaction.

Quality benefits remain a key recruiting and retention tool. From a tactical perspective, benefits still play a big role in attracting and retaining employees, a recent MetLife study confirmed. Sixty percent of employees said quality benefits are the reason they remain with their company. Forty-nine percent said benefits are the reason they came to work for the organization in the first place.

Compelling benefits programs translate into employee satisfaction. Employees who are satisfied with their benefits are more likely to be loyal and satisfied with their jobs by a wide margin, according to the MetLife study. More than 70% of employees who were satisfied with their benefits were also satisfied with their job and their employer.

Since the inception of the Barney & Barney Foundation in 2009, our associates have been actively involved in the growth and success of the foundation. Each year, associates nominate nonprofits in their community to become grant recipients at our annual “Rock the Foundation” concert event. Fundraising for this event is widely supported by the associates through both ticket sales and volunteerism leading up to and during the event. As a natural outgrowth of this associate involvement and in recognition of the value of volunteer hours, in 2014 the foundation launched a sister initiative—the Community Challenge.

What we learned is this: If you challenge an associate, be ready for a landslide of activity. From June 2014 to February 2015, Barney & Barney associates collectively volunteered over 4,400 hours at more than 100 non-profit organizations. Based on the current estimated value of volunteer time used by the government, this is the equivalent of over $100,000 in additional funds for those organizations.1

The impact to the foundation and the nonprofits in our community was apparent but we wanted to hear from our associates. What impact did the Community Challenge have on the associates, specifically related to employee recruitment and retention, the firm’s reputation, and increased community involvement?

Here is what they had to say:

Recruitment

The survey responses suggested that community involvement helps us to recruit talent. Of the sixty-two respondents hired after July 2014, when the Community Challenge was launched, 45% said that community involvement was important in their decision to work at Barney & Barney and 60% discussed Marsh & McLennan Agency's community involvement in their interviews.

Small and midsized tech companies face many challenges, but none may be as difficult as attracting and retaining talent. The task is especially difficult given what these high-growth companies are up against in Silicon Valley. Consider the following:

Google offers one-on-one consultations to new parents to help them find child care facilities

In addition to competing against cash-rich tech companies, smaller firms are grappling with increasing healthcare costs and are stuck in a new pricing system that doesn’t allow for effective rate negotiation. According to a survey by Mercer, a Marsh & McLennan Agency (MMA) sister company, employers predict that health benefit cost per employee will rise by 4.2% on average in 2016 after they make benefit plan changes, such as raising deductibles or switching carriers. This is consistent with actual cost growth in 2014 (3.9%) and the expected cost growth for 2015.

Band Together

So how does a promising tech company bring in the talent it needs when the tech giants are grabbing up the skilled employees with higher salaries, generous 401(k) plans, and impressive healthcare benefits?

One way small and midsized technology companies can compete is to take advantage of a small business trust. A relatively new way to lower employee benefit costs, tech companies are pooling their collective buying power to compete with the giants on robust healthcare benefits.

On Your Mark, Get Set, Motivate!

Savvy employers recognize the benefit of a healthy workforce. Study after study has demonstrated the increased productivity, improved morale and the health insurance savings that come with a healthy and physically active group of employees. As John F. Kennedy said, “Physical fitness is not only one of the most important keys to a healthy body, it is the basis of dynamic and creative intellectual activity.”

Yet knowing that something is important to the wellbeing of an organization is not the same as knowing how to implement an effective employee wellness program. The question remains: What can employers do to introduce healthy habits and keep employees motivated to stay active?

Marsh & McLennan Agency decided to test the effectiveness of our own wellness program Total Health by challenging our associates. In June, the MMA West San Francisco and Walnut Creek offices took part in the Get Up and Go Challenge, modeled after one of the basic challenge events from our Total Health wellness program. Using this model, we measured the number of steps people took, with the goal of 10,000 per day. This might sound like a lot, but using a conversion sheet, our associates were able to log steps taken doing everyday activities such as gardening, grocery shopping, and even housework.

Ted Kobus, co-leader of BakerHostetler’s Privacy and Data Protection team, advises on risk management, compliance, incident response strategies, and regulatory and class action defense. He has led more than 750 incident responses, is ranked in Chambers USA, and was named an MVP by Law360 for Privacy/Consumer Protection. He is currently representing Premera Blue Cross Blue Shield in incident response, law enforcement investigation, legislative inquiries, regulatory investigations, and the over 20 class action lawsuits filed to date.

Only five months into 2015, several high-profile data breaches have already affected nearly 100 million people, and this apparent data breach epidemic shows no signs of slowing down. As the fallout from these breaches continues to unfold, organizations not yet affected should take this opportunity to study these incidents and assess their own preparedness to deal with a similar event while they still can.

However, even the most rigorous breach preparations can be undercut by one crucial aspect of breach response: communication. When it comes to data breaches, perception is reality. Regardless of how diligent, thorough, or prepared an organization may be, the timing and manner in which the organization communicates a breach to the public and regulators shape how the incident is perceived more than any other aspect of breach response.

Here are 5 communication tips for surviving the data breach epidemic of 2015:

1.Don’t Go Public Until You Have All the Facts

When responding to a data breach, organizations must walk a fine line between prompt notification and accurate notification. Prompt notification is essential if affected individuals are to protect themselves. However, notifying individuals prior to gathering the information needed to assess and fully understand the incident creates the risk of providing inaccurate information. And inaccuracy can turn an already difficult situation into a nightmare.

In addition to creating a negative perception of an organization’s competency and honesty, an organization that disseminates incorrect information must spend significant time and resources to rectify the situation. These efforts may overshadow the positive aspects of the organization’s response, such as remediation efforts and corrective actions.

Taking time to collect all of the facts before going public is the best way to ensure that communications are accurate and complete, and doing so may even reveal that notification is unnecessary.

2.Avoid Sending Out Multiple Notices

When an individual receives a notice that their information has been compromised, they will likely (and understandably) be alarmed and concerned about the security of their identity. When an individual receives multiple notices regarding the same incident, they will likely (and understandably) be confused and irritated as well as alarmed and concerned about the security of their identity.

A follow-up notice rarely contains good news, and no matter how artfully the notice is written, the mere fact that multiple notices are required for a single incident naturally raises suspicion amongst recipients as well as regulators. Multiple notices also prolong the life of an incident in the public eye and increase the likelihood of inconsistency or contradiction in an organization’s messaging, intentional or otherwise. Sometimes multiple notices are unavoidable, but organizations should do everything they can to evade stirring up confusion and skepticism.

How much would your employees appreciate a cool new, employee benefits app?

Consider the following:

Over 70% of the U.S. population owns a smartphone¹

Mobile users check those smartphones 40 to 100 times each day¹

Four out of five smartphone users wake up and look at their phone within 15 minutes¹

Benefits for All

Today, an easy-to-use benefits app, fully branded with your corporate identity, is one of the best ways for employees to understand their benefit options and for employers to communicate their benefits programs.

For employers, a benefits app reduces costs, streamlines benefits communication and creates buy-in from employees, who are much more likely to turn to their smartphone for information than anyplace else.

A well-designed, fully-featured app can save your Human Resources team time and also further shift resources to mobile delivery from traditional paper-based employee communications.

A Digital Swiss-Army Knife

An app can store an organization’s entire benefits guide, as well as plan summaries for each benefit offered. For communicating throughout the year, an app can send “push notifications” to employees highlighting important plan changes or other relevant benefits program information. An FAQ residing in the app can also ease the workload on your HR team and minimize inquiries to a call center by making information readily available.